24/7 Wall St. » STD

Greek Debt & Austerity Deal, Cheered With a Thud (NBG, GREK, FXE, ALU, DB, STD)

Administrator — Thu, 09 Feb 2012 14:06:09 +0000

Reports are out that parties in Greece have finally agreed to a debt and austerity deal that will allow it to get its bailout funding and to remain part of the Euro. This is great news on the surface, but the market investors are not exactly climbing all over each other to load the boat on Greek trading. Maybe the moves to watch are in the Euro currency because the ADRs are just not really moving.

National Bank of Greece (NYSE: NBG) is up 1% on its ADR trading in New York to $3.96 this morning. Keep in mind that this has already more than doubled from the $1.64 low that was seen as recently as January 10, 2012. Not a year ago.. a month ago.

And the Greek stock market ETF, the Global X FTSE Greece 20 ETF (NYSE: GREK) has not even yet traded this morning and it has extremely thin volume even during the trading day. Shares closed Wednesday at $19.16 and its post-launch range has so far been $12.70 to $19.54.

The Rydex CurrencyShares Euro Currency (NYSE: FXE) is up by 0.15% at $132.21.

As far as other “pro-Euro” trading ADRs, we are only seeing mixed action on that front as well:

Alcatel-Lucent SA (NYSE: ALU) is up 1.5% at $1.98 but that may be after a Cisco earnings report (although Cisco is indicated lower).

Deutsche Bank AG (NYSE: DB) is trading up 1.2% at $46.82 in New York.

Banco Santander, S.A. (NYSE: STD) of Spain is trading down 0.5% at $8.71 in active pre-market trading.

Great news may finally be here, but the market has been expecting a deal or has at least been trying to come up with a fair market value around the issue of “Greece, or no Greece…”

As always, until a deal is signed this may be hearsay. Future politicians may also not choose to live up to the agreements. Sad, but possible.

JON C. OGG

Filed under: 24/7 Wall St. Wire, ADR, Currency, International Markets Tagged: ALU, DB, FXE, GREK, NBG, STD

In Banco Santander, a Microcosm of Spain’s Troubles

247wallst — Tue, 31 Jan 2012 11:46:27 +0000

Spain’s big bank — Banco Santander (NYSE: STD) — said its fourth-quarter profits fell 98%. It took a $2.4 billion charge because of its wrecked real estate portfolio. It also set aside cash to cover bad loans. There are concerns that the bank will have to be rescued by the government, which hardly has the money for what surely would be a multibillion bailout.

Banco Santander is a symbol of what is wrong throughout Spain’s economy, and what must be done to repair it.

The bank has a massive real estate portfolio. Real estate values have collapsed in Spain, perhaps worse than in the U.S. The reasons are similar to America’s — overbuilding early last decade and an unemployment rate that has risen to levels that are both troubling and unlikely to be reversed.

It is widely believed that the fortunes of Europe’s largest banks and Europe’s most troubled countries are inexorably linked. Banks hold sovereign debt in nations that must be bailed out. Private investors, which include banks, will be asked to write down part of the value of those loans. Banco Santander’s trouble is even worse than just the drop in value of government paper. Real estate values in Spain will not improve. The solutions to the nation’s unemployment rate of more than 22% seem beyond the ability of Spain’s financially troubled government to effect.

As the European Union looks to a possible rescue of Spain, its debt and deficit are not at the top of the list of its problems as they may be in a country like Greece. Greek banks are certainly in trouble, but Banco Santander may be the single best example of a financial firm that helped cause the problems in its own country. It lent against assets the value of which could never have been sustained. Now, the Spanish government is left to clean up the mess.

Douglas A. McIntyre

Filed under: 24/7 Wall St. Wire, Banking Tagged: STD

Media Digest (1/31/2012) Reuters, WSJ, NYT, FT, Bloomberg

247wallst — Tue, 31 Jan 2012 11:43:33 +0000

Toshiba cuts its profit forecasts and lowers guidance. (Reuters)

Honda (NYSE: HMC) posts a 65% drop in profits and cuts its outlook because of the yen and Thai floods. (Reuters)

Twenty-five nations, led by Germany, sign a bailout fund agreement. (Reuters)

Honda will launch its first business jet next week. (Reuters)

Research In Motion (NASDAQ: RIMM) independent directors agree that the chairman should not be a company executive. (Reuters)

German retail sales fall in December. (Reuters)

The WTO rules against Chinese policies on raw materials, but its rare earth exports are not addressed. (Reuters)

AT&T (NYSE: T) changes the roles of a number of its top managers. (Reuters)

Another director — Larry Babbio Jr. — leaves the Hewlett-Packard (NYSE: HPQ) board. (Reuters)

New 401(k) rules could help millions of American with savings. (WSJ)

State attorneys general have until the end of the week to join a bank mortgage settlement set by the federal government. (WSJ)

Banco Santander’s (NYSE: STD) profits drop 98% on its real estate holdings. (WSJ)

The vice chairman of Avon Products (NYSE: AVP) loses his job over an overseas bribery probe. (WSJ)

Symphony IRI reports that more shoppers are moving to store brands and away from traditional ones. (WSJ)

RadioShack (NYSE: RSH) shares fall on a profit warning. (WSJ)

Portugal’s borrowing costs rise to euro-area highs. (WSJ)

The Manhattan Institute reports racial segregation reached a 100-year low. (WSJ)

Verizon’s (NYSE: VZ) home broadband efforts compete with Verizon Wireless products. (WSJ)

Groupon’s (NASDAQ: GRPN) CEO defends the value of the company’s shares. (WSJ)

Starbucks (NASDAQ: SBUX) moves into India. (WSJ)

Pep Boys goes private. (WSJ)

Comscore reports that Facebook increased its display market share lead over Yahoo! (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT). (WSJ)

Many European companies begin to prepare for the economic fallout of a troubled Europe. (WSJ)

Moody’s says it was unaware of balance sheet risks taken by MF Global. (WSJ)

BSkyB will launch an online TV service. (NYT)

The Treasury Department investigates whether Freddie Mac invested based on an inability of some Americans to refinance their homes. (NYT)

A bill to curtail insider trading in Congress advances. (NYT)

EU banks may take loans of as much as $1 trillion because of financial trouble in the region. (FT)

Strong R&D and innovation can extend the life cycles of technology companies. (FT)

Greece is near a confrontation with the European Union over a rescue. (Bloomberg)

German unemployment fell more than expected in January, according to the Federal Labor Agency. (Bloomberg)

Portugal will sell more assets to help with its national debt reduction. (Bloomberg)

Douglas A. McIntyre

Filed under: 24/7 Wall St. Wire, Press Digest Tagged: AVP, GRPN, HMC, HPQ, MSFT, RIMM, RSH, SBUX, STD, T, VZ, YHOO

Fitch Joins E.U. Downgrade Waves (EWK, IRE, EIRL, IRL, EWI, TI, EWP, STD)

Administrator — Fri, 27 Jan 2012 18:30:03 +0000

Fitch has joined in on the European sovereign credit rating downgrades. First it was S&P, but we might argue that this should have mostly been factored in already. Is it a secret that the economies in Europe have been slowing and have more exposure these days? Fitch is cutting six Eurozone sovereign ratings (on Rating Watch Negative since 16 December 2011) as follows (with ETFs and major ADRs indicated):

Belgium LT IDR downgraded to ‘AA’ from ‘AA+’; Negative Outlook; ST IDR affirmed at ‘F1+’: iShares MSCI Belgium Index Fund (NYSE: EWK) is still up 0.4% at $11.33; 52-week range $10.23 to $15.65.

Ireland LT IDR affirmed at ‘BBB+’; Negative Outlook; ST IDR affirmed at ‘F2′: Bank of Ireland (NYSE: IRE) down 1.6% at $6.15; 52-week range of $3.99 to $27.00 (adjusted for reverse split). MSCI Ireland Capped Investable (NYSE: EIRL) is down 1.5% at $20.17; 52-week range is $16.78 to $23.80. The Irish Investment Fund, Inc. (NYSE: IRL) is still up almost 1% at $7.22 and its 52-week range is $6.49 to $8.77.

Italy LT IDR downgraded to ‘A-’ from ‘A+’; Negative Outlook; ST IDR downgraded to ‘F2′ from ‘F1′: iShares MSCI Italy Index Fund (NYSE: EWI) is down 0.8% at $12.92; 52-week range is $10.88 to $20.15. Telecom Italia S.P.A. (NYSE: TI) is flat at $10.33 an dthe 52-week range is $9.74 to $16.04.

Spain LT IDR downgraded ‘A’ from ‘AA-’; Negative Outlook; ST IDR downgraded to ‘F1′ from ‘F1+’: iShares MSCI Spain Index Fund (NYSE: EWP) is still up 0.4% at $31.44 against a 52-week range of $28.53 to $45.99. Banco Santander, S.A. (NYSE: STD) is still up 0.7% at $8.16 against a 52-week range of $6.77 to $12.72.

Two more downgrades were issued:

Cyprus LT IDR downgraded to ‘BBB-’ from ‘BBB’; Negative Outlook; ST IDR affirmed at ‘F3′
Slovenia LT IDR downgraded to ‘A’ from ‘AA-’; Negative Outlook; ST IDR downgraded to ‘F1′ from ‘F1+’

Should this have really been a surprise? If so, these would be performing far worse.

JON C. OGG

Filed under: 24/7 Wall St. Wire, ADR, Economy, Emerging Markets, ETF, International Markets, Mutual Funds Tagged: EIRL, EWI, EWK, EWP, IRE, IRL, STD, TI

Euro Banks on the Rise for Merkel/Sarkozy (STD, BBVA, IRE, CS, UBS, DB, NBG, BCS, RBS)

Administrator — Mon, 05 Dec 2011 12:45:31 +0000

Sarkozy and Merkel have gone from killers of the markets to saviors of the market, and oddly enough there is no full resolution yet to the Euro Zone debt crisis other than he hope that the two will reach an agreement of sorts on higher oversight of local government budgets. The move has European bank ADRs on the rise all over again.

Spain is a particular winner. Banco Santander, S.A. (NYSE: STD) is up almost 5% at $7.94; and Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) has not traded but shares are indicated up around $8.90 in New York after a $8.53 close on Friday.

The Bank of Ireland (NYSE: IRE) is up almost 4% at $5.02.

The Swiss banks are on the rise as Credit Suisse Group (NYSE: CS) is up 2.6% at $25.25 and UBS AG (NYSE: UBS) is up 1.6% at $12.44.

Deutsche Bank AG (NYSE: DB) is up 1.2% at $40.48.

National Bank of Greece SA (NYSE: NBG) has not yet traded.

The British Banks are higher as well and they are technically not a part of the Euro Zone other than doing business in Europe. Barclays PLC (NYSE: BCS) is up 4.1% at $12.35; The Royal Bank of Scotland Group plc (NYSE: RBS) is up 5.9% at $7.15.

JON C. OGG

Filed under: ADR, Banking, International Markets Tagged: BBVA, BCS, CS, DB, IRE, NBG, RBS, STD, UBS

European ADRs Surging on Global Central Bank Action (ALU, MT, BHP, STD, IRE, CS, UBS, DB, FTE, PHG, ERIC, NOK, NBG, SI, TI)

Administrator — Wed, 30 Nov 2011 14:03:50 +0000

The action out of China’s virtual easing by lowering reserve requirements was already a boost to global markets, but the coordinated central bank efforts of the U.S., Canada, Europe, Switzerland, and the U.K. to preserve global liquidity is creating a boom for stocks today at the expense of the U.S. dollar.

Alcatel-Lucent (NYSE: ALU) is up only 1.25% at $1.60 and shares are flat in local trading in Paris. Arcelor Mittal (NYSE: MT) is up 10% at $18.26 and BHP Billiton Ltd. (NYSE: BHP) is up 6.5% at $74.21.

Banco Santander, S.A. (NYSE: STD) is up 5.6% at $7.56 and the stock is up 4% in local trading in Madrid. The Bank of Ireland (NYSE: IRE) is now up 8.6% at $4.92 and shares are up 7% in local trading in Dublin. National Bank of Greece SA (NYSE: NBG) is up 4.9% at $2.55 in New York but shares are up almost 3% in local trading in Athens.

Credit Suisse Group (NYSE: CS) is up 7% at $24.03 and UBS AG (NYSE: UBS) is up 6.1% at $12.18. Deutsche Bank AG (NYSE: DB) is up 7.9% at $38.36 and shares are up 6.6% in local trading in Frankfurt.

France Telecom (NYSE: FTE) is up 4.3% at $17.01 and shares are up 3.4% in local trading in Paris. Koninklijke Philips Electronics NV (NYSE: PHG) is up 4.6% at $20.00 in New York trading. LM Ericsson Telephone Co. (NASDAQ: ERIC) is up 5.5% at $10.37; Nokia Corporation (NYSE: NOK) is up 4.2% at $5.73. Funny, Nokia’s problems are not really tied to “liquidity” issues or other uncertainties. Siemens AG (NYSE: SI) is up 5.9% at $101.54 in New York and shares are up 4.1% in local trading in Frankfurt.

Telecom Italia SpA (NYSE: TI) is up 5.6% at $11.32 in New York and shares are up 4% in local trading in Milan.

JON C. OGG

Filed under: ADR, International Markets, Pre-Market Activity, Trading Alert Tagged: ALU, BHP, CS, DB, ERIC, FTE, IRE, MT, NBG, NOK, PHG, SI, STD, TI, UBS

European ADRs Dragging Down U.S. Trading (ALU, MT, BHP, STD, IRE, CS, UBS, DB, FTE, PHG, ERIC, NOK, NBG, SI, TI)

Administrator — Tue, 15 Nov 2011 12:44:11 +0000

The Eurozone growth rate of 0.2% in the third quarter may have met expectations but this is just one more example that growth is so low already that getting out of the debt hole is going to be no easy task. As a result, we have another day of Euro-led selling and almost every major European name that has a New York ADR tied to its is trading lower.

Alcatel-Lucent (NYSE: ALU) is down another 2.5% at $1.92 and shares are down 2.6% in local trading in Paris.

Arcelor Mittal (NYSE: MT) is down 3.3% at $18.36 and BHP Billiton Ltd. (NYSE: BHP) is down 1.5% at $74.85.

Banco Santander, S.A. (NYSE: STD) is down almost 2% at $7.47 and the stock is down 2% in local trading in Madrid.

The Bank of Ireland (NYSE: IRE) is down 2.1% at $4.70 and shares are down 2.3% in local trading in Dublin.

Credit Suisse Group (NYSE: CS) is down 3.6% at $23.32 and UBS AG (NYSE: UBS) is down over 2.5% at $11.60.

Deutsche Bank AG (NYSE: DB) is down 2.2% at $37.68 and shares are down 2.6% in Frankfurt.

France Telecom (NYSE: FTE) has not traded in New York but shares are indicated under $17.00 after a $17.10 close on Monday; shares are down 1% in Paris.

Koninklijke Philips Electronics NV (NYSE: PHG) is down 3.1% at $18.86 in New York trading.

LM Ericsson Telephone Co. (NASDAQ: ERIC) is down 1.8% at $9.99; Nokia Corporation (NYSE: NOK) is indicated down almost 2% at $6.42.

National Bank of Greece SA (NYSE: NBG) is down 5.5% at $0.52 in New York but shares are down 8.5% in local trading in Athens.

Siemens AG (NYSE: SI) is down 1.2% in New York and shares are down 1.7% in local trading in Frankfurt.

Telecom Italia SpA (NYSE: TI) is down almost 3% at $11.55 in New York and shares are down almost 3.1% in local trading in Milan.

JON C. OGG

Filed under: ADR, International Markets, Pre-Market Activity, Trading Alert Tagged: ALU, BHP, CS, DB, ERIC, FTE, IRE, MT, NBG, NOK, PHG, SI, STD, TI, UBS

European ADRs Follow Italy Much Lower, Wrecking U.S. Market Gains (E, LUX, TI, ALU, MT, BHP, STD, IRE, CS, UBS, DB, FTE, PHG, ERIC, NOK, NBG, SI, EWI)

Administrator — Wed, 09 Nov 2011 12:32:30 +0000

Well, it used to be Greece taking us down daily, but now it is the much larger concern of Italy. The markets were supposed to be cheering that Silvio Berlusconi was going to step down but then suddenly the fears of who would or could replace him and the uncertainty have set in. Now Italy’s ten-year yield is not just above 5% and 6%, but above 7%. Unlike Greece just being a flea on a dog, Italy is even larger than a dog’s tail and it is frankly too big to just get a bailout.

Eni SpA (NYSE: E) is down over 4% around $42.30 and shares are down 3% in Milan. Luxottica Group SpA (NYSE: LUX) has not traded and we do not yet have Ney Work indications, but shares were down 3.1% in Milan. Telecom Italia SpA (NYSE: TI) is indicated down around 7% in New York at $11.30 but shares are down 4.5% in local trading in Milan.

Elsewhere in Europe….

Alcatel-Lucent (NYSE: ALU) is down around $1.98 (ouch, 52-week low) after a $2.16 close in New York, and shares are down almost 4% in local trading in Paris.

Arcelor Mittal (NYSE: MT) is down over 8% at $19.03 and BHP Billiton Ltd. (NYSE: BHP) is down 4.5% at $76.47 in New York trading in the early pre-markets.

Banco Santander, S.A. (NYSE: STD) is down 7% at $7.50 in active early New York trading but the stock is down more than 3% in local trading in Madrid.

The Bank of Ireland (NYSE: IRE) is down 1.4% at $5.17 in New York and shares are down 2.2% in local trading in Dublin.

Credit Suisse Group (NYSE: CS) is down 7.1% at $24.77 and UBS AG (NYSE: UBS) is down 6.1% at $11.97 in early New York pre-market trading.

Deutsche Bank AG (NYSE: DB) is down over 9% at $36.80 in New York and shares are down about 5% in Frankfurt.

France Telecom (NYSE: FTE) has not traded in New York yet but its shares are down 2% in local trading in Paris.

Koninklijke Philips Electronics NV (NYSE: PHG) is indicated down around $19.65 after a $20.86 close in New York for a loss of close to 6%.

LM Ericsson Telephone Co. (NASDAQ: ERIC) is indicated down 5% around $10.15; Nokia Corporation (NYSE: NOK) is down 4.7% at $6.50.

National Bank of Greece SA (NYSE: NBG) is indicated flat to down a couple cents after a $0.59 close in New York but shares are down 4.1% in local trading in Athens.

Siemens AG (NYSE: SI) is down 4.5% at $98.56 in New York trading and shares are down 1.6% in local trading in Frankfurt.

iShares MSCI Italy Index (NYSE: EWI) is trading down 5.2% at $12.87.

Another rough day is being brought on by the woes of the nanny and endless welfare nations in Europe. S&P futures are down over 2% with well over two hours until the market opens.

JON C. OGG

Filed under: ADR, Economy, International Markets, Pre-Market Activity, Trading Alert Tagged: ALU, BHP, CS, DB, E, ERIC, EWI, FTE, IRE, LUX, MT, NBG, NOK, PHG, SI, STD, TI, UBS

European ADRs Leading The Charge Higher (ALU, MT, BHP, STD, IRE, CS, UBS, DB, FTE, PHG, ERIC, NOK, NBG, SI, TI, EWI, EWQ, EWG)

Administrator — Thu, 27 Oct 2011 12:01:02 +0000

Greece and the rest of the PIIGS were hurting us for so long that it seems hard to believe that the Europeans are setting a 50% haircut for the Greek sovereign debt and that they have agreed to a $1.4 trillion (1 trillion Euro) Euro-zone rescue package. The news is causing a major rally in the stock markets with the German DAX up over 4% and the French CAC up 5%. The FTSE in England is up 2.6% and the Greek stock market (there actually is one) is up over 6.5%. European ADRs are leading the markets higher this Thursday… Much higher.

Alcatel-Lucent (NYSE: ALU) is up over 2.5% at $2.80 and shares are up 5.1% in local trading in Paris.

Arcelor Mittal (NYSE: MT) is up almost 7% at $20.95 and BHP Billiton Ltd. (NYSE: BHP) is up 5.1% at $82.07.

Banco Santander, S.A. (NYSE: STD) is up 5.6% at $8.87 and the stock was up 6.1% in local trading in Madrid.

The Bank of Ireland (NYSE: IRE) is up 6.2% at $6.17 and shares are up 7% in local trading in Dublin.

Credit Suisse Group (NYSE: CS) is flying with shares up 9.6% at $30.67 and UBS AG (NYSE: UBS) is up 7.8% at $13.65.

Deutsche Bank AG (NYSE: DB) is up a whopping 14% at $46.00 and shares are up 15% in Frankfurt.

France Telecom (NYSE: FTE) is up 1.5% at $18.58 in New York and shares are up 1.5% in Paris as well.

Koninklijke Philips Electronics NV (NYSE: PHG) is up about 6% at $22.23.

LM Ericsson Telephone Co. (NASDAQ: ERIC) is up 5.6% at $10.83; Nokia Corporation (NYSE: NOK) is up 5.3% at $7.13.

National Bank of Greece SA (NYSE: NBG) is up 15.6% at $0.545 in New York but shares are up 12.2% in local trading in Athens.

Siemens AG (NYSE: SI) is up 3.1% at $108.58 in New York and shares are up 3% in local trading in Frankfurt.

Telecom Italia SpA (NYSE: TI) has not yet traded in New York but shares have a pre-trade indication of $13.20 versus a $12.73 close in New York; shares are up 4% in local trading in Milan.

iShares MSCI Italy Index (NYSE: EWI) is up 1.8% at $14.05. iShares MSCI France Index (NYSE: EWQ) is up 4.4% at $22.45 and iShares MSCI Germany Index (NYSE: EWG) is up 4.4% at $22.12.

JON C. OGG

Filed under: ADR, International Markets, Pre-Market Activity, Trading Alert Tagged: ALU, BHP, CS, DB, ERIC, EWG, EWI, EWQ, FTE, IRE, MT, NBG, NOK, PHG, SI, STD, TI, UBS

European ADRs Leading U.S. Stocks Lower (ALU, MT, BHP, STD, CS, DB, FTE, PHG, NOK, SI, TI, UBS)

Administrator — Tue, 04 Oct 2011 12:02:54 +0000

It feels like Groundhog day in Europe. Greece fears are escalating and European markets are sharply lower. The Europeans are just unwilling or are unable to deal with their woes in a timely manner. DJIA futures are down about 100 points again. These are the ADRs of mostly European companies which have traded this morning and leading the markets lower with the FTSE down 3.1%, the DAX down 3.7% and the CAC down 3.2% are as follows:

Alcatel-Lucent (NYSE: ALU) is indicated down 4% at $2.32 but shares are down about 7% in local trading in Paris.

Arcelor Mittal (NYSE: MT) is down “only” 1.1% at $15.33 and BHP Billiton Ltd. (NYSE: BHP) is down 2% at $63.10 this morning.

Banco Santander, S.A. (NYSE: STD) is down almost 1% at $7.61, but shares are down 3% in local trading in Madrid.

Credit Suisse Group (NYSE: CS) is down 2% at $23.73.

Deutsche Bank AG (NYSE: DB) is down 3.4% at $31.70; shares are down about 6% in Frankfurt.

France Telecom (NYSE: FTE) is down only $0.02 at $15.78 in New York; shares are down almost 1.3% in local trading in Paris.

Koninklijke Philips Electronics NV (NYSE: PHG) has not yet traded, but shares are indicated down around $16.70 versus a $17.26 close.

Nokia Corporation (NYSE: NOK) is down 3.3% at $5.26.

Siemens AG (NYSE: SI) is down 1.5% at $85.60, but shares are down 2.9% in local trading in Frankfurt.

Telecom Italia SpA (NYSE: TI) is actually indicated higher this morning but there has been no New York pre-market trading with about two hours until the open. Shares are up 0.9% in local trading in Milan.

UBS AG (NYSE: UBS) is up almost 2.5% at $10.83, but shares are down 0.8% in local markets.

It is going to be another bad day for emerging markets and all we can say there is that we noted the details of the chart deaths taking place in BRIC and emerging markets.

JON C. OGG

Filed under: ADR, International Markets, Trading Alert Tagged: ALU, BHP, CS, DB, FTE, MT, NOK, PHG, SI, STD, TI, UBS